( 1 ) THE Union of India, representing the Central Railway, has filed this appeal, against the judgment of the Addl. District Judge, East Nimar, Khandwa at burhenpur, dated 29th September 1970, decreeing the plaintiff's claim for damages for conversion of goods to the extent of Rs. 16,016.

( 2 ) THE facts briefly stated are these. On 22-5-1968, the plaintiff's tender for purchase of coal-ash accumulated at the Nandgwm. pump-house for a period of one year from the date of the execution of the contract for a sum of Rs. 2,135 by running contract on a lump sum basis was accepted. The estimated quantity of coal-ash was 3,500 c. ft. , and the rate settled was Rs. 61 per brass, i. e. , 100 c. ft. The plaintiff, accordingly, on 22-5-1968 deposited an amount of Rs. 2,135 being the price of coal-ash for a year in full, i. e. , the period of contract, and also Rs. 213 as security deposit. Thereafter, the parties executed a formal contract dated 15-6-1968, Ex. D-1, for sale of coal-ash by running contract. The defendant-Railway administration, however, by its letter dated 20-6-1968, ex. D-2, cancelled the contract.

( 3 ) THE plaintiff's claim is that the unilateral cancellation o